I don’t like banks so a bank that promises to do things differently is a fresh breath. TSB, born from the EU-enforced breakup of Lloyds Banking Group is one such bank. Although still owned by Lloyds Banking Group (but due to be sold off), the bank makes bold promises on keeping money invested in the UK and supporting local communities. How true this is is too early to say at the moment given that the bank is only a few months old.
As I’m one up for giving new things a try, I decided to give their new Classic Plus current account a go. 5% AER variable interest on balances up to £2,000 that they say they won’t “take.. away after a year“ seems attractive – especially compared to rival Nationwide’s FlexDirect whose 5% interest drops off after a year.
There’s also no requirement to switch your account to them or transfer any Direct Debits – the only requirement being you must pay in £500 per month and use paperless statements and correspondence to keep the interest rate. For savvy savers this transfer can be done from any current or savings account.
‘Nice and smooth’
Everything started out nice and smooth with probably the simplest and smoothest online signup process of any financial institution I’ve dealt with. Your account is created there and then online, although worryingly, your account number and sortcode are emailed to you rather than presented on their secure website.
Transferring money in is like any other bank with TSB accepting Faster Payments meaning the money is moved within minutes (although can take up to 2 hours). Transferring money out is similarly speedy with TSB using phone-verification instead of Chip-and-PIN readers or passcode generators.
Where the deal breaks is making payments by Debit card.
Although supporting contactless payments (via Visa), the experience is far from pleasant. Payments – whether made in supermarkets, McDonald’s, the Post Office or elsewhere – can take nearly a week to show up in my account at all. TSB’s online banking doesn’t even reduce the ‘available balance’ to reflect the transaction amount. Not too bad for a 99 pence transaction in McDonald’s but if you’re a regular debit card user, having to keep tabs on your receipts manually until they’re applied to your account is far from ideal.
[stag_icon icon=”quote-left” size=”30px”] the people most likely to be attracted are savvy savers [stag_icon icon=”quote-right” size=”30px”]
That leads to the online banking service on offer. Although allowing you to do everything you would need – balances, statements and transfers – I can only describe it as a barebones-looking service which includes a nice extra feature called Money Planner as well as a mobile-optimised version. How useful Money Planner is, I don’t know as I tend to do most of my spending on credit cards so am unable to use this feature.
Their mobile app is pointless and slow. This might be a point worth noting for regular customers. The mobile banking feature inside the app is a shell for their mobile banking website so to have a much faster and comfortable experience just login to the website from your browser.
So why did I join then?
TSB must have been well aware of this when creating the account that the people most likely to be attracted are savvy savers who want to maximise their interest. 5% interest equates to £100/ year (£80 after 20% tax). That beats every single savings account available on the market at the moment.
I’ll be keeping the account but as you can guess not as my main current account. It’s far from a pleasant experience so far with nothing to make it stand out from rivals.
I have not been paid for this post. See my [link id=’2′ text=’financial disclaimer’].